China Dialogue is the world’s first fully bilingual website devoted to the environment. Our mission is to promote direct dialogue and the search for solutions to our shared environmental challenges. China Dialogue is an independent, non-profit organisation based in London, Beijing and San Francisco.

China is growing fast and, as it grows, it is faced with urgent environmental challenges. Environmental costs may account for 10 per cent of China’s GDP and the effects of pollution, desertification and climate change are already beginning to be felt within China and outside her borders. Climate change, species loss, pollution, water scarcity and environment damage are not problems confined to one country: they are challenges that concern all the world’s citizens, but the rise of China gives them a new urgency. Tackling these challenges will require a common effort and common understanding. Here at China Dialogue we aim to promote that common understanding.

From the China Dialogue blog

Europe can do better

The EU-China relationship on climate change should be deeper. But is the obstacle Europe’s inability to “speak with one voice”, or a failure to fully understand Chinese climate change politics? Diarmuid Torney explains.

Since 2005, the European Union and China have sought to develop dialogue and cooperation in the area of climate-change policy. This has taken place primarily within the framework of the EU-China Partnership on Climate Change, agreed at the 2005 EU-China Summit. Within this framework, both sides have developed institutionalised dialogue as well as cooperation in specific areas. On paper, this cooperation looks impressive.

Senior officials from both sides meet annually, and a ministerial policy dialogue was established in 2010 between European climate commissioner Connie Hedegaard and vice-minister Xie Zhenhua, China’s lead negotiator for climate change. The two sides have also initiated institutionalised dialogue in a number of related areas, including environmental policy, forests, energy, transport and, most recently, sustainable urbanisation.

Alongside the development of these numerous mechanisms for policy dialogue, the EU and China have also launched cooperation projects in a range of areas related to climate change, including the so-called “Near-Zero Emissions Coal” project focused on carbon capture and storage and the “Europe-China Clean Energy Centre” in Beijing. Other areas for cooperation include the Clean Development Mechanism, capacity-building for policy development and most recently the development of emissions trading in China.

From a European perspective, the aim of developing this engagement was to facilitate and support the development of domestic climate-change policies in China, and to persuade the Chinese government to adopt emissions targets as part of a global climate-change agreement for the period beyond 2012, when the first phase of the Kyoto Protocol expires. This formed part of a broader EU strategy of developing bilateral outreach with key countries including the United States, China, India, Brazil and South Africa.

However, this strategy contributed relatively little to the EU’s ability to shape the international climate negotiations in accordance with European goals. Nowhere was this failure more evident than at the Copenhagen climate-change conference in December 2009. European preferences were clearly at odds with those of other major players, and a failure to understand and appreciate these differences was in part responsible for the EU’s marginalisation at the summit. While the EU played a more prominent role at the subsequent Cancún and Durban climate-change conferences, the Copenhagen experience has cast a long shadow over European climate diplomacy.

Part of the explanation for the limited impact of European “climate diplomacy” undoubtedly lies in the declining power of the EU in world politics, a process accelerated by the global financial crisis since 2008. It is also true, of course, that the EU often finds it difficult to “speak with one voice” at the international level.

However, while there is some truth in these perspectives, they miss an important weakness in the European Union’s approach to international climate politics. To really move forward, the EU must develop a deeper understanding of the positions and underlying domestic politics of other major players. Put simply, the recurrent focus on whether the EU succeeds in “speaking with one voice” in its interactions with the outside world neglects the issue of whether, to what extent, and how the EU “listens” to the interests and preferences of other countries. This has been a particularly prominent problem in its external relations on climate change.

The development of cooperation on climate change with China could have provided the EU with the means by which to develop a deeper strategic understanding of Chinese preferences with respect to climate-change policy, and the domestic politics and institutional actors underpinning those preferences. Such an understanding could help in the formation of EU strategies in the international negotiations. And, with respect to bilateral cooperation, it could provide a fuller picture of where, how -- and importantly, why -- Chinese and European positions converge or diverge. This is particularly important for the EU’s relations with China, since the nature of the Chinese political system renders it more difficult to understand for European policy-makers.

However, the EU-China relationship has generally failed to deliver this kind of deeper understanding to European policymakers.

One difficulty on the EU side is a lack of institutional resources. In practice, responsibility for managing EU engagement with China lies with the the European Commission’s Directorate General for Climate Action (DG Clima). However, the resources devoted by the European Commission to engagement with China on climate change are simply not sufficient.

The EU Delegation in Beijing employs one counsellor dealing with environment and climate change; one half-time officer reporting to the Directorate-General for Energy (DG Energy); and a small number of staff responsible for cooperation projects. In Brussels, DG Climate Action employs almost no staff with responsibility to manage or track the bilateral relationship. More staff are needed if the EU expects to gain significant added value from its engagement with China on climate change.

This feeds into a second problem, namely that the EU-China relationship is highly fragmented along two dimensions. First, it is fragmented between EU-level engagement with China and that of the member states. This is not necessarily a bad thing; indeed, there may be advantages to many diverse mechanisms of cooperation, provided that unnecessary duplication of effort is avoided.

Second, it is fragmented between policy areas, with separate dialogues for climate change, energy, transport, environment, forests and sustainable urbanisation. Similarly, fragmentation of this kind is not in itself a problem. Developing cooperation and dialogue across a range of related but distinct policy fields opens the possibility for greater impact, and may succeed in making progress in less politically sensitive areas than in the sometimes highly-charged field of climate policy.

However, such fragmentation becomes a problem if it creates duplication of effort, and especially if it exceeds the resources and capacity of the institutional actors on the EU side which have been tasked with coordination and ensuring synergies and coherence. An institutionalised coordination mechanism exists “on the ground” in Beijing in the form of regular meetings of European Commission and EU member state environment counsellors, coordinated by the EU delegation.

However, these coordination efforts appear to have brought limited benefits so far. In fact, it is hard even to assess whether and to what extent the totality of EU cooperation and dialogue with China on climate change is synergistic, since there is no publicly-available list of the totality of EU activities in China in this area.

There is, moreover, a broader institutional problem with respect to EU climate diplomacy, which stems from the division of labour between DG Climate Action and the European External Action Service (EEAS), the EU’s new diplomatic service. Under these new arrangements, EU external relations on climate change are almost exclusively the responsibility of DG Climate Action.

Bringing together all of the climate-change functions of the Commission within one DG brings some benefits, but it also has the negative effect of hindering integration of climate change with into the broader framework of EU external relations. Moreover, it reinforces the tendency to view climate change as a distinct, technical area of policy-making which is the remit of specialists, rather than viewing it in broader strategic terms.

Developing effective engagement with China and other key countries on climate change should be a priority of EU external relations on climate change. The agreement reached at the Durban climate-change conference in December 2011 represents only the beginning of another long negotiating journey. If the EU hopes to be successful in influencing the outcome of these negotiations, it would benefit greatly from deepening its understanding of the preferences and domestic politics of other key players. This will not happen unless the EU finds a way to manage better its currently underdeveloped bilateral engagement with China and other key states.

Diarmuid Torney is a post-doctoral fellow at the Freie Universität Berlin. His research interests include global environmental politics and EU relations with China and India.

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Reviving the valley

Tourism offers an opportunity to rebuild the local economy of Pakistan’s Swat Valley, ravaged by conflicts and floods. But can it also restore its rivers and forests? Rina Saeed Khan reports.

For years, Pakistan’s former princely state of Swat, famous for its fruit orchards, snow-clad mountains, Buddhist stupas and trout-filled rivers, was a popular tourist destination. Its hotels were clean and its people well educated, at least in the main towns. Then the Taliban came. First, they shut down the hotels. Then they started destroying them, along with the schools.

“They blew up the famous Pakistan Tourism Development Corporations’ ski resort in Malam Jabba. They also started bombing the girls’ schools. It was a terrible time – anyone who had any means started leaving Swat,” said Ehsanullah Khan, a landowner and long-time resident of Matta, which was at the heart of Taliban activities at the time.

Like many others, Khan moved to the capital, Islamabad, when the army moved in to flush out the Taliban in May 2009. The army operation, though bloody, did not last very long. By July 2009, the internally displaced persons of the Swat Valley, once known idyllically as the “Emerald Valley”, began to return to their war-torn homes and villages. Khan went back to Matta and was dismayed to see the damage: “The crops were destroyed, the rice could not be sown, and the tourism industry was ruined. The local people were in a quandary.”

Before the arrival of the Taliban, tourism was the main revenue source for the local economy of Swat. Many tourists from Khyber Pukhtunkhwa would come here in the summers to escape the scorching heat of Peshawar and the plains. The hotel industry mushroomed as tourists poured in.

After the Pakistan military operation ended, NGOs and donor agencies stepped in to help the local people rebuild their livelihoods. Then, in 2010, massive floods hit the Swat Valley due to unprecedented monsoon rainfall in the region and damaged many more hotels located alongside the River Swat.

The flooding was made worse by extensive deforestation that started in the 1990s and worsened thanks to links between the Taliban and the timber mafia, which operates in the north of Pakistan. Under Taliban rule, many forests in Swat were cut down. Experts say that the lack of trees and thick vegetation to slow down the water flow intensified the flooding of 2010 took on greater intensity. “If you don’t stop the water it will go at a greater speed,” pointed out Shafqat Kakakhel, former deputy director of the United Nations Environment Programme (UNEP). “Deforestation is a big problem in Pakistan.”

WWF-Pakistan estimates forest cover in the country is now less than 3%. Wherever the Taliban took control (as it did in Swat and Waziristan) protected forests were cut down and exploited with no regards to the consequences. There is no information available on the extent of the deforestation, however, since most NGOs are focused on reviving the Swat Valley economy, and rebuilding hotels, schools and other infrastructure lost to war and floods.

But before the floods, tourism had brought environmental problems as well as economic benefits to the region. Many of the hotels along the River Swat had been dumping their waste into the river for years and NGOs protesting against the pollution. In 2006, the United Nations Development Programme (UNDP) funded a local NGO to conduct a pollution survey of the River Swat, which revealed problems beginning at the hill resort of Kalam and intensifying around Mingora (near the capital of Swat) and that the pollution in the river was well above acceptable limits.

Previously, the government’s environmental protection agency had tried unsuccessfully to construct a compost plant and septic tanks in Mingora to save the River Swat from pollution by sewerage and effluent of hotels.

The United States Agency for International Development (USAID) estimates “pre-conflict annual contribution of the tourism industry to Swat's economy” at US$60 million (379 million yuan). It says there was “a sharp decline after the conflict in 2007, with total revenue losses of an estimated US$27 million with floods in July 2010 adding to the challenges.”

With USAID’s assistance, 239 hotels in Swat received US$2.7 million (17 million yuan) in cash grants and in-kind assistance such as construction material, furniture and other hotel supplies. They also received training in hotel management and other technical assistance. After years of inaction, hotels in Swat finally started re-opening their doors in 2011 to receive tourists for the summer season.

In July 2011, a nationwide media campaign was launched to help attract tourists to Swat. And, according to USAID, “the occupancy rate has climbed exponentially for these hotels, and US$668,390 in sales revenue has been recorded for the 2011 season, which is a substantial increase over last year.”

The agency claims the revival of tourism has helped initiate the overall recovery of Swat’s economy. Ameer Noshad, the owner of two hotels in Swat agrees: both of his hotels are once again catering to tourists. “Things are finally looking up for me and for hundreds of other hoteliers in Swat,” he pointed out.

But for Khan, there are still challenges. While agreeing that Swat is now safe for tourism, he said it is still difficult for visitors to venture into the more picturesque mountain areas of Kalam, Bahrain and Madyan due to army check posts and flood-damaged roads. These areas are known for their pine forests, alpine meadows and clear lakes; and are ideal for trekking and hiking.

He continued: “There are no Taliban left in the area and the people of Swat want to recover from the terror they faced. But I think that more than building hotels, they should fix the roads.

“We desperately need better roads. Once the tourists start coming, the local people will start building the hotels themselves. What the government and NGOs should do is to make sure that there is proper drainage and waste management for all these new hotels and that the river is not polluted like before and that the remaining forests are protected.”

Khan's foreign friends are keen to visit Swat again, he said. As the old saying goes, “if you build it, they will come.”


Rina Saeed Khan is a freelance environmental journalist based in Lahore. 

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A yam between two rocks

Beijing and New Delhi are competing for influence in Nepal. Navin Khadka asks how this rivalry will shape the country’s hydropower policies.

Editor’s note: in February, Nepal signed a US$1.6 billion agreement with China to develop the 760-megawatt West Seti hydropower project within its borders. This marked a major push by China into Nepal’s water and power sector, which has long been dominated by India. It came as several other major dam projects, mainly developed with Indian investment, have stalled for various reasons, including protests by a faction of Nepal's ruling Maoists against the awarding of deals to foreign companies. Nepal is sometimes called the "yam between two rocks” due to its position between India and China. Its hydropower sector is living up to the name.

It has become something of a merry-go-round. A Nepali lawmaker in a parliamentary subcommittee probing the West Seti hydro project deal reportedly accused energy ministry officials of behaving like Chinese agents.

Meanwhile, a faction of Nepal’s Maoists, the ruling party, opposing the initial agreement signed with Indian companies to develop Upper Karnali and Arun III hydropower projects, called the deal pro-India and anti-national.

If those were sweeping swipes and extreme judgements, consider this softer approach: no sooner had Nepal’s energy ministry signed the Memorandum of Understanding (MOU) on West Seti with the China Three Gorges International Corporation (CTGIC), than hopeful Indian hydropower developers contacted ministry officials, according to senior sources.

“They told us we were so quick to sign the MOU with the Chinese company while the projects they wanted to develop have remained in limbo,” one source told me. “They said they were happy to see the fast progress in case of West Seti and hoped that same would happen to the projects they have applied for.”

Indeed, it has been four years since the Nepali government signed MOUs with Indian companies GMR Energy and Sutlaj Jalvidyut Nigam to develop Upper Karnali and Arun III respectively. These projects have not moved forward since.

While it was barely a year ago that CTGIC came in contact with the Nepali government, the two have already signed the initial agreement. Power generated by the West Seti project will be entirely for Nepal, whereas Upper Karnali and Arun III, as agreed in the MOUs, will generate electricity mainly for the Indian market.

Who could understand that distinction better than the power-starved Nepali population? Perhaps that was why the Indian developers too “have agreed to be flexible to make more electricity available to Nepali consumers,” according to a senior politician involved in informal discussions with the Indian companies.

If that is how the Indians have begun to lobby, particularly in the wake of the deal signed with the CTGIC, what will the Maoist-led government do now? “We will be guided by the national policy of equidistance with both our neighbours,” energy minister Post Bahadur Bogati said in an interview for a report I did for the BBC Nepali service. “That policy will be followed in the area of hydropower development as well.”

Even if the Maoists tried seriously to pursue that policy, will it work? Especially, when observers believe Beijing and New Delhi have intensified competition to secure increased influence in Nepal?

Chinese companies have slowly but surely secured several development projects, including hydropower schemes. While some of them may have been completed in a satisfactory manner, many have seen costs spiral or severe and painful delays — the mirage of the Melamchi drinking water project is a striking example.

Even the CTGIC that built the almost 20,000-megawatt Three Gorges Dam has had financial troubles. China’s National Audit Office has uncovered 31 financial issues related to accounting, financial management, investment, bidding and corporate management, according to the Chinese state-run Xinhua news agency.

It is true that most Chinese contractors with projects in Nepal are private companies from the northern neighbour. But the latest contract signed, the 750-megawatt West Seti hydro-electric project, was witnessed by Chinese ambassador Yang Houlan himself. This happened in the same Nepal where, back in 1954, ministers agreed during a meeting with India that “...in matters relating to the relation of Nepal with Tibet and China, consultations will take place with the government of India.”

A lot of water has flown down Nepali rivers since then. Meanwhile, India has been able to secure a series of water-resource treaties that critics say do not much favour Nepal. And now, when Nepali bureaucrats talk of so many yet-to-be-done surveys before deciding whether or not to go for the Kosi high dam – that will control floods in India’s Bihar state – Indian state politicians have no doubt that the structure will be built.

Next, keen observers say, will be the newly elected chief minister of India’s Uttar Pradesh state, Akhilesh Yadav, who could start pressing for the Pancheshwar multipurpose project. Apart from dealing with the bordering Indian state governments, an unstable and disunited Nepal will also have to be receptive to New Delhi’s bigger agenda; like the mammoth river linking project involving more than 30 rivers.

So, will the tug of war between the two Asian giants shape Nepal’s water resources and hydropower policies? During his recent whistle-stop visit to Nepal, Chinese premier Wen Jiabao said Beijing wanted to see Nepal-India relations become stronger. A few days later, his Indian counterpart Manmohan Singh reportedly said India was happy to see Nepal’s good relations with China.

If Singh and Wen really meant what they said about Nepal garnering good relations with both, hydropower development would be an area to reflect that. Movement here would indeed indicate a change in the way Beijing and Delhi regard each other when it comes to Nepal. 

Navin Singh Khadka is a BBC journalist based in London

This article was first published in the Kathmandu Post. It is reproduced here with permission

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